New House Speaker Nancy Pelosi has put the 2002 Sarbanes-Oxley (SOX) regulatory monster at the top of her list of things to tackle in January 2007. Well wait, isn’t this exactly what the Dems are in favor of? A massive regulatory state that hogties big business?
Not if your most financially supportive constituents are being hurt by such regulation. You see, Nanci Pelosi’s district is just north of Menlo Park, a place that some large venture capital firms call home. The partners at the Menlo Park venture capital firm Kleiner Perkins Caufield & Byers, in fact, donated more money to Pelosi’s campaign this year than did the AFL-CIO labor union. Surprised? Why?
Venture capital firms, as we know, invest in start-ups and make dough by taking the companies public and selling stock shares. Sarbanes-Oxley is the huge ox blocking the road to going public – the compliance costs of adhering to SOX are extortionate and oftentimes create inpenetrable barrriers for taking smaller firms public. So who better to cozy up to than the newly-appointed (and local) Democratic Speaker, one of the most powerful politicians in Washington? Money and power creates favor-for-favor alliances, making one party indistinguishable from the other. But the yahoos who punch the chads don’t have a clue.
Is SOX revision a good thing? Any step back in regulation is a great thing, however, don’t trust the statist power brokers in corporate Americas to be lobbying for free market ideals anytime soon. They just want the State on their side so they can fill their pockets and run.
Is there another reason that lawmakers plan to jump on SOX in 2007? This one you’re not going to believe.
Revising Sarbanes-Oxley “will take bipartisan cooperation,” says Robert Grady, a former aide to President George H.W. Bush who now oversees U.S. venture investments for the Washington-based Carlyle Group, a private-equity company.
Grady, who’s also chairman of the venture-capital association, says the timing is good because both the law’s authors, Maryland Democratic Senator Paul Sarbanes and Ohio Republican Representative Michael Oxley, are retiring at the end of the year.
“There is a certain reluctance among members of Congress to offend them while they are there,” says Grady, 49.
Imagine that. These birds would rather destroy American business than “offend” the clodhoppers that saddled business with this crippling disease in the first place.
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Wow, this is a surprise. Or maybe it isn’t. I keep trying to develop the expectation that Republicans are far worse than we think and Democrats are often much better in inadvertent ways. Still, the rhetoric is so powerful on both sides that the reality never entirely sinks in.
If Sarbanes-Oxley is repealed or significantly modified, it will be for the wrong reasons. Reducing the inefficient and unethical regulatory/interventionist state will not be the driving ideology, but rather special-interest, legalized influence peddling.
Modifying Sarbanes-Oxley would be an excellent example of winning a battle but loosing the war, since no reduction in interventionist ideology would have occurred. And in the long-run, only a fundamental change in ideology towards reason and freedom will produce a better world.
And as far as any differences in fundamental ideology between Republicans and Democrats is concerned, I view the issue as follows: no differnce, just different sides of the same statist coin. While the ornamental details of each side of the coin are different, it is still the same debased coin.
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